Financial Future

The word “frugality” has left a more negative connotation for most people than simply being a saver, a cheapskate or tightwad. There is a thin line difference to saving and too much frugality to the point of being awkward and ridiculous. This is where the negative connotation comes from.

But if you are guided with the right principles and reasons in deciding to live a frugal life, you would never go wrong.

If you have decided to live frugally, no need to be worried of insults. Keep your head up high. And keep your focus through these tips.

1. Eating Out – Having gimmicks with friends on a Friday night is fine if you do it once in a while. But this can be expensive if you add them up at the end of the month.

2. Clothing – Naturally, if you are the kind of person who adores signature and designer clothes, do not expect that there will be something left of your take home pay. Instead of being trendy, wear clothes that can easily be matched with your other clothes.

3. Own Home – If you are planning to move out and find a place to settle, do not be overwhelmed by the excitement, instead be practical. As a start, buy a smaller house or try other ways like rent-to-own, do-it-yourself arrangements, and owner financing.

4. Buying Your Own Car – Shy away from sports cars or SUVs. Just stick to your purpose of buying a car which is to transport you anywhere you need to go. Check out also program cars like a new car warranty. Maybe this is not just the best time to replace your car with a new one.

5. Shopping for Groceries – As much as possible do not go with items that are branded. Choose non-brands and try looking for items on the highest or lowest shelves for best prices. Grab the opportunity and shop during sales or use coupons.

6. Family Out – There are inexpensive ways to bond with your family and be entertained like going to libraries, local parks, malling, picnics, visit friends and local church.

7. Buying School Supplies – Stock school supplies at home and do not buy anything fancy.

8. Be contented with what you have and try to live within what you earn.

9. Plan your Child’s College Education – Teach them the ways to be independent and self-supporting by encouraging them to apply for scholarships and “on campus jobs”.

10. Be Aware of your Financial Limitations

11. Anticipate your Failures by Planning – Have always a budget plan so you would avoid impulsive buying.

Managing Money; Budgeting, What you Need to Know

These days many people are looking at managing their money by customizing a budget. “Where to being?” seems to be the most asked question. My advice is to structure your budget into three subjects, cost of living, allowance, and savings. Let’s look at each one of these subjects in closer depth.

Cost of living; you will need to ask yourself some difficult questions. First, how can you cut expenses? Can you get a lower mortgage payment if you refinanced? Today the interest rates for a mortgage are low. You will hear “lowest it has been in forty years”. That is of course if your credit rating is high enough to qualify for a lower interest. If you’re not able to get one of the low rates, it may not be worth your, or expense to refinance. Keep in mind there are always closing costs, and yes you can usually include them into your new mortgage, but it will add to the principal. In some states the closing cost is a percentage of your initial amount to borrow. That can be a hefty price added on. Also, it may not be worth refinancing if you have paid over 10 years into your present mortgage. Rule of thumb is, after 10 years you will most likely havemost of the interest paid, and will be paying into the principal, and after all, paying off the principal is the whole objective. Another way to cut cost of living, is to look at all those extras you have. Do you really need that 200 channels plan for your TV? Do you buy a lot of convenient foods? How about cooking double recipes? Then freeze the extra for different day when time is short. Or worse yet, do you eat too many fast foods? Yes, I know it is a lot easier to take the kids to the local fast food for a burger, but making them yourself can help lower those costs, and it is healthier for you and the kids. Another idea is to compare your insurance policies about every three years. Look at the car, house, life, health, insurances. You may be pleasantly surprised, if you take the time toshop around. Also look at what your deductibles are. A five hundred dollar deductible may not be ideal when you compare the lower premium of a thousand dollar deductible.

Allowance; number one rules is; pay yourself first. If you were like me, your parents started you on an allowance when you where young. My dad gave me fifty cents a week. That was a lot of money back then, for a third grade kid. Did you think your parents were being nice because you were such a wonderful kid? Remember when you wanted something so bad and you were told to save for it. What happen to thatconcept mentality? I can tell you what happen, it went out the way of credit cards. We as a society have adjusted to looking at the credit card as a piggy bank. Made just for you, to break into and purchase the video games, or that vacation you have wanted. If you want to manage your money, learn to save for that special item. But to save you have to be paid. The first person you should pay is yourself. Be realistic, what kind of daily expenses do you have you can use your allowance for? Maybe gas for the car, or bus fare. Do you carry your lunch? Or do you eat out? All of these expenses you may be deducting out of your checking account with your cash card. While I will agree the cash card is very convenient, tracking your budgeted allowance can be difficult using the card. I find it much easier to keep track of cash in my wallet. Any cash left over goes into the “mad money” for the one thing I am saving for, and not using my credit card to purchase

Savings; is the third andlast subjectwe will discuss here. I am referring to an “emergency” savings account. After you have spent so much time calculating where you can cut costs, learn to save some of those hard earned dollars. My financial manager suggests six months of income saved for emergencies. That can take some time to do, especially if you have racked up a credit card bill, or a massive car payment. You still save some money. Even if all you can afford is twenty dollars a week, at the end of a year you will have thousand dollars, and it shouldn’t even hurt. I suggest an auto withdrawal from your checking account to your saving account. I have found this the most painless way to save.

In future articles I will break down how to save for your retirement, and how to getcontrol on credit card debt. But for now look at these steps as the beginning. We have all heard, “Every journey starts with the first step”. I wish you a safe, and prosperous, journey.

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Budgeting is a practice that should be taken very seriously. Without budgeting you increase your likeliness to fall into debt and decrease your chances of being able to properly save money. With proper budgeting you will be able to better pay off bank loans and payday loans such as the ones you will find if you click here. Budgeting is the key to proper money management and without it you may fall into financial traps that are very difficult to escape from. With this being said, you should take all the necessary steps to budget so that these negative outcomes never happen.

Start the budgeting process every time you receive your paycheck whether it is weekly, bi-weekly, or monthly. Before each paycheck make it routine to always plan out what you are going to do with the money earned. Keep in mind that you should never spend any money from your paycheck without creating your budget first.

Your budget should include a list of everything that your paycheck needs to go towards. On this list should be things such as rent/mortgage, utilities, vehicle payments, debt, gas, food, etc. All these necessities should be considered your priority when it comes to what your money will go towards. Once this list has been created you should take the time to write down all the money that is going to be put towards each expense.

Once you have listed all your expenses, add them up and subtract that number from your paycheck. If the number turns out negative, you will have a clear indication that you are living beyond your capability. However, if you have money remaining, it is then important that you separate your money into groups. One group should be dedicated to expenses that turn out to be more expensive than planned. For example, sometimes you might end up having a more expensive utility bill and need to take back-up money from what you have set aside. Furthermore, 30% of your paycheck should go towards saving and whatever is left after subtracting all of the above from your paycheck can be left for spending money.

Once all these expenses have been written down it is imperative that you do not touch the money that is set aside for your monthly expenses. It is a good idea to withdraw all your spending money so that you have physical possession of the cash. That will ultimately help you only spend that amount until your next paycheck.

The importance of budgeting is crucial. It is important to take every necessary step to insure proper money management. With this skill you will be able to better avoid the debt that many people find themselves trapped in.